Considered
and decided by Kalitowski, Presiding Judge, Klaphake, Judge, and Willis, Judge.

U N P U B L I S H E D O P I N I O N

WILLIS, Judge

A group of investors sued respondent
bank for breach of contract, negligence, and conversion, contending that the
bank improperly changed signatories on an account that held investment
funds. On remand from this court, the
district court granted summary judgment for the bank on the ground that the
investors’ claims were barred by a provision in the account agreement that
requires a customer to promptly examine each account statement and to report
account problems to the bank within 30 days.
Appellant, one of the investors, challenges the judgment, arguing that
the provision does not apply to him and that he is entitled to additional
equities and defenses. We affirm.

FACTS

Appellant Allan Steffes is one of a
number of investors who provided financing to 4E Corporation, a Nevada
corporation, in anticipation of a public offering of 4E Corporation’s
stock. The company’s president, sole
director, and sole shareholder was Edmond X. Ramirez Sr. 4E Corporation planned to produce an
electric car, which was demonstrated at a Roseville motel in May 1993 to
attract prospective investors who might want to acquire an equity interest in
the project.

In July 1993, 4E Corporation, by
corporate resolution, authorized Steffes and another investor, Roger Bonnema,
to open an account with respondent Heritage Bank NA-Willmar in 4E Corporation’s
name, “as described in the 4E Corporation Escrow Account document.” That document, attached to the resolution,
purported to establish an escrow account and to condition the release of any
funds to 4E Corporation upon a total of $1,300,000 being deposited in the
account within 90 days. If and when
that occurred, Steffes and Bonnema were to release $800,000 to 4E Corporation,
with the remainder to be held in the account for future use; if at least
$1,300,000 was not deposited in the account within 90 days, all funds were to
be returned to their sources. The
corporate resolution required the signatures of both Steffes and Bonnema on all
checks written on the account.

Steffes and Bonnema signed a
signature card to open the account. The
signature card provides that, by signing, Steffes and Bonnema agreed that the
account would be governed by the terms of the “Account Agreement and Disclosure”
(account agreement) between 4E Corporation and Heritage. Over the next several weeks, the account
balance reached $1,050,000, including a $500,000 investment by Steffes. Several other investors also deposited funds
in the account.

On
August 23, 1993, 4E Corporation faxed to Heritage a corporate resolution,
signed by Ramirez, removing Steffes and Bonnema as signatories on the account
and naming Ramirez as the “primary signatory.”
The resolution also authorized Ramirez to “transfer funds, in any manner.” Two days later, 4E Corporation deposited
$250,000 in the account, which brought the balance to $1,300,000, and Ramirez
called Heritage and requested it to transfer $800,000 to a 4E Corporation
account in Las Vegas. After reviewing
the resolution, a Heritage employee wired the funds to the Las Vegas account.

Five days later, on August 30, 1993,
some of the investors met with Ramirez in Willmar. Handouts distributed at that meeting included a copy of the
corporate resolution that removed Steffes and Bonnema as signatories. On October 5, 1993, Heritage wired an
additional $500,000 from the account to 4E Corporation’s Las Vegas account,
apparently at Ramirez’s direction.

In December 1993, Ramirez provided
to the investors, including Steffes, a corporate financial report that showed
that funds had been transferred from 4E Corporation’s account at Heritage and
that substantial funds had been spent on car development and personnel, legal,
and travel expenses. Two weeks later,
Steffes wrote a letter to Ramirez criticizing his use of funds and encouraging
him to focus on completing 4E Corporation’s initial public offering. The letter did not mention any transfer of
funds.

Ramirez converted to his personal
use the funds that he had transferred from 4E Corporation’s account at
Heritage, and he was subsequently convicted of wire fraud in federal
court. In August 1998, nearly five
years after the first wire transfer, Steffes and several other investors sued
Heritage for breach of contract, negligence, and conversion. The district court granted summary judgment
to Heritage on the ground of laches, and Steffes and several other plaintiffs
appealed. In an order opinion, this
court remanded for the district court to first “consider which statute of
limitations, if any, applies to [the] claims.”

On
remand, Heritage moved for summary judgment.
The district court granted summary judgment for Heritage, concluding
that the 30-day limitation period for reporting account problems to Heritage,
as provided for in the account agreement, barred the investors’ claims and that
the investors were not entitled to additional equities and defenses. Steffes appeals.

D E C I S I O N

On appeal from summary judgment,
this court determines whether there are any genuine issues of material fact and
whether the district court erred in its application of the law. Cummings v. Koehnen, 568 N.W.2d 418,
420 (Minn. 1997). This court views the
evidence in the light most favorable to the party against whom summary judgment
was granted. Fabio v. Bellomo,
504 N.W.2d 758, 761 (Minn. 1993).

I.

As a preliminary issue, this court
questioned whether Steffes is the sole appellant here. Although the notice of appeal filed with
this court states that only “Plaintiff Allan Steffes appeals” from the summary
judgment, Steffes’s brief inconsistently refers to Steffes both as one of an
indeterminate number of appellants and as the sole appellant. At oral argument, in response to a question
regarding this issue, Steffes’s counsel stated that Steffes is the sole
appellant and that this court should disregard any reference to multiple
appellants. We therefore consider
Steffes to be the sole appellant here.

II.

Steffes argues that the district
court erred by granting summary judgment to Heritage because genuine issues of
material fact exist regarding whether the 30-day limitation period for
reporting account problems, as set forth in the account agreement, applies to
him. Steffes contends that the district
court erred as a matter of law by determining that (1) the investors were
third-party beneficiaries of both the escrow agreement and the account
agreement, (2) the investors were not entitled to additional equities and
defenses, and (3) the 4E Corporation account at Heritage was not an escrow
account, and therefore Heritage was not liable to the investors for conversion
for “improperly disbursing” money from the account.

Account Agreement’s 30-Day Limitation Period

The account agreement states:

You
are responsible for promptly examining each account statement and reporting any
problems to us. Each statement will be
considered correct and we will not be responsible for any payment made and
charged to your Account unless you notify us in writing within certain time
limits after the statement and checks are made available to you. We will not be liable for any altered check
or any check with a forged signature unless you notify us within thirty (30)
calendar days after the statement and the altered or forged item(s) are made
available. * * * You must also report any other account problem within
thirty (30) calendar days. If you
do not do this, you lose your right to assert the problem against us.

(Emphasis
added.)

Steffes contends that the 30-day limitation period in the
account agreement does not apply to him because “there is no evidence that any
of the Investors saw the [account agreement] or, if they did, understood that
Heritage Bank’s position was that their money was being deposited in the Escrow
Account subject to the terms of the [account agreement].” He also complains that, although he and
other investors questioned Heritage’s president about the transfers, the
president never informed them about the account agreement’s 30-day limitation
period.

But Steffes does not dispute that he and Bonnema signed a
signature card when they opened 4E Corporation’s account. That signature card provided that, by
signing, Steffes and Bonnema agreed that the account would be governed by “the
terms set forth in the Account Agreement and Disclosure” between 4E Corporation
and Heritage. The district court did
not err by concluding that the terms of both the escrow agreement and account
agreement governed 4E Corporation’s account at Heritage.

Steffes contends that the investors were third-party beneficiaries
of the escrow agreement but not the account agreement, and therefore Heritage
cannot assert the 30-day limitation in the account agreement to bar his
claims. The rights of a third-party
beneficiary “depend upon, and are measured by, the terms of the contract.” Haas
v. DaimlerChrysler Corp., 611 N.W.2d 382, 385 (Minn. App. 2000) (quoting Brix v. General Accident & Assurance
Corp., 254 Minn. 21, 24, 93 N.W.2d 542, 544 (1958)) (citations omitted), review denied (Minn. Aug. 22, 2000). Because
both the escrow agreement and the account agreement govern the account and
because Steffes’s rights were measured by the terms of those contracts, the
30-day limitation period in the account agreement applies to his claims.

Additional Equities and Defenses

Steffes argues that he is entitled to additional equities and
defenses beyond those afforded to 4E Corporation because he deposited money in
4E Corporation’s account at Heritage in reliance on the escrow agreement. In a suit against a promisor, a third-party
beneficiary to a contract is generally subject to the same defenses as the
parties to the contract itself. See
Hansen v. Proctor, 246 Minn. 67, 71-72, 74 N.W.2d 281, 284 (1955). But a third-party beneficiary may be
entitled to additional equities and defenses if he has been induced to alter
his position in reliance on the promise.
Id.

Steffes contends that investors relied on the corporate
resolution, which stated that the account at Heritage was an escrow account and
that the account required the signature of two of the investors to remove the
funds. The district court found that 4E
Corporation had opened a savings account, not an escrow account, and Steffes
does not dispute that his attorney told him, in writing, that Heritage “is
fairly small, has no trust department and cannot open an escrow account.” Further, a corporate resolution authorized
Steffes and Bonnema as signatories and a second corporate resolution later
removed them as signatories. If Steffes
means to argue that Heritage promised to abide by the terms of a corporate
resolution, Heritage has kept that promise.
The district court did not err by concluding that Steffes is entitled to
no additional equities or defenses.

Conversion from Escrow Account

Steffes claims that Heritage is liable to him for conversion
because it improperly disbursed funds from 4E Corporation’s escrow
account. The district court held that
the 30-day limitation period in the account agreement barred the investors’
conversion claim. The district court concluded
that, regardless, the 4E Corporation account at Heritage Bank was not an escrow
account and therefore Heritage Bank could not be liable to the investors for
conversion based on improper disbursements from that account.

Minnesota law provides a six-year statute of limitations,
except as otherwise provided by the Uniform Commercial Code (UCC), for claims
based on breach of contract, negligence involving personal property, and
conversion. Minn. Stat. § 541.05,
subd. 1 (2000). The district court applied
the provisions of Article 4 of the UCC, which permits parties to vary its
statute of limitations by agreement, to the investors’ claims to determine the
applicable statute of limitations and concluded that the 30-day limitation
period in the account agreement barred those claims. See Minn. Stat. §§ 336.4-103 (2000) (providing that
“[t]he effect of the provisions of this article may be varied by agreement”);
336.4-111 (2000) (providing that “[a]n action to enforce an obligation, duty,
or right arising under this article must be commenced within three years after
the cause of action accrues”).

But the conversion claim was based on allegedly improper
disbursements from 4E Corporation’s account by funds transfers. Article 4A of the UCC applies to funds transfers. Minn. Stat. § 336.4A-102 (2000). Article 4A bars a customer from asserting
that a receiving bank is not entitled to retain funds received pursuant to a
payment order if the customer fails to notify the receiving bank of its
objection to the payment order within one year of the date that the customer
received notice of the order. Minn.
Stat. § 336.4A-505 (2000); see Hedged Inv.
Partners, L.P. v. Norwest Bank Minn., N.A., 578 N.W.2d 765, 769 n.1 (Minn.
App. 1998) (noting that Article 4A “precludes a customer from claiming that a
bank is not entitled to retain payment unless the claim is made within one year
of notification); see also Minn.
Stat. §§ 336.4A-103 (2000) (defining “payment order” to include oral or written
instruction by sender for bank to pay money to beneficiary); 336.4A-104 (2000)
(defining “funds transfers” to mean series of transactions beginning with
payment order).

Like Article 4, Article 4A also provides that the parties may
vary by agreement “the rights and obligations of a party to a funds
transfer.” Minn. Stat. § 336.4A-501
(2000). The 30-day limitation period in
the account agreement therefore time-barred Steffes’s conversion claim. And even if Steffes had successfully argued
that the terms of the account agreement did not apply to the investors, he
admits that he found out about the funds transfers in December 1993, when
Ramirez provided a report to the investors.
He apparently never notified the Las Vegas bank, the receiving bank of
his objection to Ramirez’s payment order, and there is no evidence that
Heritage attempted to fraudulently conceal either the removal of signatories or
the funds transfers. See Larson v. Dunn, 460 N.W.2d 39, 43
(Minn. 1990) (noting that fraudulent concealment prevents statute of limitations
from running). Because either the
30-day account limitation or the UCC statute of limitations regarding funds
transfers barred Steffes’s conversion claim, we do not reach his argument that
the district erroneously determined that the 4E Corporation account at Heritage
was not an escrow account.